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What is a Performance Directed Culture?

At the highest level, it’s culture where everyone is actively aligned
with the mission of the organization, where transparency and accountability are
the norm, new insights are acted upon in unison and conflicts are resolved
positively and effectively.

My last book, The Performance Management Revolution, was about the coming
revolution in performance management and my belief in the ascendancy of a new management
system for the global enterprise in the 21st century.

As I began work on the new book, my intention was to capture and present
best practices for creating the management system I’ve just described. Along
the way, I realized something essential to my task: before an organization can
succeed, it must first create a culture that values performance, transparency
and accountability. In other words, people trump processes and technology every
time.

This does not mean that technology
is not important. It is – but as an enabler of people, and not the other way
around. These realizations prompted me to shift the focus of my book to people
and culture, and to organizations that have established – or have made enough
progress that there is no turning back – what I call a performance-directed
culture.

About The Performance Culture Maturity Model TM

Understanding The Maturity ModelTM

In preparing for my new book, I realized that before I could begin interviewing organizations and considering them as candidates for case studies, I needed a model that would provide a lens or filter through which I could assess their culture. That led me to develop the Performance Culture Maturity Model TM, which serves as the centerpiece of the book.

The Maturity Model is the most comprehensive model of its kind that I am aware of. It helps me understand the path specific organizations have taken in their quest for better performance. It allowed me to position an organization along that path at specific points in time, and that is valuable too. If there is one thing I have learned in the course of my career, it’s that a performance-directed culture is a journey, not a destination.

My Performance Culture Maturity Model TM employs six criteria – shown here at the top of the model – with four levels of maturity – shown down the left side – that determine the degree to which an organization has made progress.

The four levels of maturity determine how mature an organization is in each of six performance-directed culture criteria. Even the least mature organization would not be at the absolute lowest level in each category. So almost without exception, every enterprise will be at different levels of maturity across the six criteria. This is normal and is part of the process of assessing and improving one’s maturity.

Four Levels of Maturity

The first and lowest level of achievement on the Maturity Model is Chaos Reigns. At this level, little progress or achievement towards a performance-driven culture is evident. Fragmentation and disorganization are the norm. This is not a sustainable state, with organizations at this level at serious risk of collapse.

I call the next level of achievement Departmental Optimization. At this level, departments and functions are playing for themselves. While this sort of organization seems to function well enough to survive, cooperation and collaboration are virtually unheard of. This is the most common level for organizations and underscores our preference, as humans, to work in small groups, with people of similar backgrounds, outlooks and goals. Anthropologists refer to these groups as tribes. If we look around today, we can find them in modern society and in business. For example, we can think of corporate departments and functions as tribes of a sort (e.g., Finance, Sales, IT). With similar background and experience, outlooks and goals they work together to protect their tribe from outside threats.

At the level of Performance-Driven Culture Emerging, an organization has started to see the benefits of working across departmental barriers and is more focused upon a common mission. Cross-functional sharing and cooperation tend to be impromptu and opportunistic. Two or more functions may start to work together for mutual benefit. A virtuous cycle starts to emerge as the benefits of a performance-directed culture become obvious, with management providing the needed support and encouragement.

By the level of Performance-Directed Culture Realized, performance improvement has permeated the very fabric of an organization’s culture. Processes center around transparency and accountability. Individuals are rewarded for sharing, cooperating and supporting the mission of the enterprise. The enterprise thinks, strategizes, plans, analyzes, and executes as a single organism. In Maslow’s world this would be the equivalent of “self actualization”.

Six Performance-Directed Criteria

Each of my six performance-directed culture criteria fall into one of three categories: strategic, operational or technical.

In the strategic category are: Alignment with Mission and Transparency and Accountability. Because they are strategic, these attributes must be initiated and driven – or at the very least recognized and actively supported – by the most senior of management, typically C-level executives. That’s to say that no other level within the organization can raise the organization up to the levels of a performance-directed culture for these two criteria. Additionally, these will help elevate all other areas of performance-directed culture achievement. Without them, a true performance-directed culture is not attainable.

In the operational category are Action on Insight and Conflict Resolution. Operational criteria are something everyone in an organization has a role in driving on a day-to-day basis and cannot be readily controlled or directed by senior management. This is the realm of every person. The rank and file employees and stakeholders determine how and when to execute against these criteria. Hence, success or failure is in their hands. Because of their operational nature, they represent continuous processes, which require constant attention and diligence to avoid regression to a previous stage.

In the technical category are Trust in Data and Availability and Currency of Data. Technical criteria are managed in partnership between business management and the IT function or other technical resources. Although a performance-directed culture is not driven by technology, certain aspects of technology are important enablers. In particular, the availability, currency and trust in data are absolutely critical for a performance-directed culture to be created and sustained in the long term and on an enterprise scale. So, in acknowledgment of this reality, I included two criteria that focus upon information technology –specifically data. Although data warehousing and Business Intelligence (BI) technologies play a role here, they must be employed in alignment the other performance-directed culture criteria: strategy and operations.